Eastern Visayas State University

UNIT VIII-A BUDGETING: IT’S IMPLICATION TO

EDUCATIONAL PLANNING

PRESENTED BY: JOMAR A.

TALISAYSAY
After the discussion of this unit, the students will be
able to:
1. apply actual budgeting of resources in their
respective schools;
2. appreciate and know how do budget design work;
BUDGET

A budget is an estimation of revenue and expenses over

a specified future period of time and is usually
compiled and re-evaluated on a periodic basis. Budgets
 can be made for a person, a group of people, a
business, a government, or just about anything else that
makes and spends money.
 REVENUE

Revenue is the income generated from normal business

operations and includes discounts and deductions for
returned merchandise. It is the top line or gross income
figure from which costs are subtracted to determine net
income.
EXPENSES
An expense is the cost of operations that a company
incurs to generate revenue. Common expenses include
payments to suppliers, employee wages, factory leases,
and equipment depreciation. Businesses are allowed to
write off tax-deductible expenses on their income tax
returns to lower their taxable income and thus their tax
liability.
TWO TYPES OF BUSINESS EXPENSES

1. Operating expenses: Expenses related to the

company’s main activities, such as the cost of goods
sold, administrative fees, and rent.
2. Non-operating expenses: Expenses not directly
related to the business' core operations. Common
examples include interest charges and other costs
associated with borrowing money.
 BUDGETING
• Budgeting is creating a plan to spend your money. Good
budgeting is spending less than you are earning as you
plan for your financial goals. Budgeting is the
fundamental step in achieving financial literacy, and by
extension, reaching financial security and freedom.
• This spending plan is called a budget. Creating this
spending plan allows you to determine in advance whether
you will have enough money to do the things you need to
do or would like to do.
 FUNCTIONS OF BUDGET

1. Forecasting
2. Planning
3. Communication
4. Motivation
5. Evaluation
6. Control / Coordination
7. Authorization
 FORECASTING
 This entails making at calculated attempt into
knowing what the future holds.
 PLANNING

 planning depends on forecast that has been made in

the past to make decision about the future.
COMMUNICATION
 Gathering information: information about a company
and the activities of its competitors are gathered
during the process of making all kinds of budget.
 Disseminating information: budgets when not acted
upon are useless, so, the budgetary system has an
inbuilt information dissemination ability that ensures
that responsible managers actually got the budget
which they will work with.
 MOTIVATION

 Motivation is the driving force that makes people to

run towards their goals rather than trudge towards it.

 How does budgeting becomes a motivation to

employees?
EVALUATION

 Evaluation means to judge something with a sort of

standard.

 How to evaluate budget accomplishment?

CONTROL / COORDINATION

 Co-ordination simply means ensuring that different

parts of the business work in congruence.
 AUTHORIZATION

 Budgeting helps to minimize misappropriation and

embezzlement that would have characterize
corporations if a system of authorization does not
exist.
 LINKING PLANNING AND BUDGETING
Two Tier Budgeting of Department of Budget and Management
1. DBM assesses agencies based on their operating needs, the
cost of running existing programs and projects, and their
ability to use up their budget and deliver on their targets.
This step ensures that agencies get only the budget that they
need and can spend.
2. Involves assessing agencies’ proposals for new projects or
expand existing ones. Agencies should be able to convince
DBM that their projects are implementable, have direct and
measurable impact on the citizens, and are in line with the
government’s agenda for inclusive development.
 2021 BUDGET OF THE PHILIPPINES 4.506 T
(21.80% OF GDP)

Top 10 Departments:
1. Education (DepEd, SUCs, CHED, and TEDA), Php 751.7 Billion
2. Department of Public Works and High Ways, Php 695.7 Billion
3. Department of the Interior and Local Government, Php 249.3 Billion
4. Department of Health, Php 210.2 Billion
5. Department of National Defense, Php 205.8 Billion
6. Department of Social Welfare and Development, Php 176.9 Billion
7. Department of Transportation, Php 87.9 Billion
8. Department of Agriculture, Php 71.0 Billion
9. The Judiciary, Php 45.3 Billion
10. Department of Labor and Employment, Php 371.1 Billion
 WHAT IS SCHOOL MOOE?

• The Maintenance and Other Operating Expenses

(MOOE) is the allocated funds for public elementary
and secondary schools that can be spent on activities
and necessities (i.e. electricity and water) that
support learning programs and help maintain a safe
and healthy environment in schools.
 USES OF SCHOOL MOOE
1. To fund activities as identified in the approved School Improvement Plan (SIP) for
implementation in the current year and as specifically determined in the Annual
Implementation Plan (AIP) of the school.
2. To support expenses for school-based training and activities that are selected or
designed to address the most critical needs that will improve learning outcomes.
3. To finance expenses pertaining to graduation rites, moving up or closing ceremonies and
recognition activities.
4. To procure school supplies and other consumables for teachers and students deemed
necessary in the conduct of classes.
5. To fund minor repairs of facilities, building and grounds maintenance and the upkeep of
the school.
6. To pay for wages of full time janitorial, transportation, mobility and security services.
7. To pay for utilities and communication expenses.
8. In no case shall the school MOOE be used for the procurement of school furniture (such
as seats, and teacher’s table and chairs), and textbooks and other instructional materials,
even if these expenditures are contained in the SIP.
TYPES OF BUDGET
1. Cash Flow Budget
2. Operating Budget
3. Financial Budget
4. Sales Budget
5. Production Budget
6. Overhead Budget
7. Personnel Budget
8. Marketing Budget
9. Static Budget
10. Master Budget
 CASH FLOW BUDGET

• Cash flow is the net amount of cash and cash

equivalents being transferred into and out of a
business. Cash received represents inflows, while
money spent represents outflows.
 OPERATING BUDGET
• The operating budget contains the expenditure and
revenue generated from the daily business functions
of the company. The operating budget concentrates
on the operating expenditures, including cost of
produce sold in the market or popularly known as
cost of sold goods (COGS) and the revenue or
income. COGS is the cost of direct labor and direct
materials that are tied to production.
 FINANCIAL BUDGET
• A financial budget presents a company's strategy for managing
its assets, cash flow, income, and expenses. A financial budget is
used to establish a picture of a company's financial health and
present a comprehensive overview of its spending relative to
revenues from core operations.
 SALES BUDGET
• This type of budget gives some expected sales revenue and
expenses and selling for the organization for a specific period of
time. It is the backbone of the organization or it is also known as
the nerve center since it is the initiation on which are deposits are
also based. Sales forecasting plays a very important role and
determination of sales budget is both should be proper for further
things to fall in place.
 PRODUCTION BUDGET
• Sales budget forms the basis for the preparation of the
production budget. Stock levels are also taken into consideration
along with the manufacturing program of the organization. The
production budget is very useful in determining the cost of
production which in turn will decide the price of the product.
Every organization has a different type of production budget.
 OVERHEAD BUDGET

• Overheads Budget is the type of Budget which involves all the

costs and expenses needed for a specified period of time of
production. This includes but is not limited to indirect labor,
direct and indirect factory expenses, and other related expenses.
 PERSONNEL BUDGET
• Personnel Budget is one of the crucial types of the budget which
covers the manpower budget for the specific period. Labor
hours, workers grade, costs etc.. Since it takes care of all the
personnel, and efficient working of an organization depends on
the payment of the employees, this is one of the important types
of budget.
 MARKETING BUDGET
• This type of Budget takes care of all the marketing and
promotional activities of the company for the customers. The
ultimate aim of marketing is to assist the sales team to generate
more business.
 STATIC BUDGET
• Static Budget is similar to Fixed costs. These are the expenses
which are static and remain unchanged over a long period of
time and it could be plumbing supply costs, warehouse cost,
factory maintenance etc.. It is not influenced by the sales volume
or any other changes in the organization.
 MASTER BUDGET

• A combination of all the individual budgets of the company,

which gives a complete picture of the overall financial picture of
the organization is called as Master Budget. All the departmental
budgets like Sales, Marketing, Overheads etc. budgets are
combined to prepare Master Budget. Establishing relation in all
the departments is essential and master budget takes care of that.
The larger the organization, the useful is master budget since
gives one view over all the departments.
For where your treasure is, there will
your heart be also.
Matthew 6:21